MBS RECAP: More Focus on Europe. More Weakness For Bonds

Europe has been the driving force for US bond markets over the past 2 days. Perhaps this will continue to be the case or perhaps it's simply due to US bond markets reaching an important technical level and hopping on to the nearest bandwagon of trading inspiration. To be sure, France is not the US when it comes to the country's impact on the global economy. And Marine Le Pen is not Donald Trump. Nonetheless, markets have viewed a Le Pen victory as a potential destabilizing factor for the European Union. Unlike the paradoxical Trump trade, markets are pretty sure this one wouldn't suddenly turn out to be horrible for the bond market and amazing for stocks. As such, European stocks and bonds have been under varying amounts of pressure as Le Pen's chances have ebbed and flowed…(read more)